Inside the Structure of Dened Contribution/401(k) Plan Fees: A Study Assessing the Mechanics of the ‘All-In’ Fee Conducted by Deloitte Consulting LLP for the Investment Company Institute November 2011 Table of Contents I. Background 3 • Approach 3 • Report Disclosure 4 II. Executive Summary 5 • Many Fee Arrangements Exist 5 • The ‘All-In’ Fee 6 • Apparent ‘All-In’ Fee Drivers 7 • Comparing the 2009 and 2011 ‘All-In’ Fee Studies 8 • Summary 8 III. Survey Respondents 10 • Plan Sponsor Demographics 10 • Sample of Survey Plans Compared with the Broader 401(k) Plan Universe 10 • Plans’ Retirement Service Providers 12 • Retirement Service Provider / Plan Sponsor Relationships 14 • Participant Accounts 15 • Automatic Plan Design Features 16 • Investment Features 17 IV. The Mechanics of Defined Contribution Plan Fees 19 V. The ‘All-In’ Fee 20 • Composition of the ‘All-In’ Fee 20 • Payer of Fees 20 • Summary ‘All-In’ Fee Results 21 • Weighting Survey Responses to Estimate the ‘All-In’ Fee 21 VI. Fee Drivers 23 • Primary ‘All-In’ Fee Drivers 23 • Secondary ‘All-In’ Fee Drivers 28 • Factors Not Found to Be Significant 30 VII. Summary 32 VIII. Appendix 33 2 Defined Contribution/401(k) Fee Study 2011 3 I. Background At the end of 2010, employer-sponsored defined contribution plans held an estimated $4.5 trillion in assets, 1 and for many American workers, these plans have become an important part of retirement savings. As assets in defined contribution plans have grown, so too has the scrutiny around these plans, especially in light of the turbulent investment markets experienced in recent years. This study was designed to analyze and identify the drivers of defined contribution plan fees. The fees charged for these plans have come under particular focus as the Department of Labor (DOL) aims to create greater transparency through regulatory disclosure requirements under §408(b)(2) and §404(a) of the Employee Retirement Income Security Act (ERISA). As part of an ongoing comprehensive research program, the Investment Company Institute (“ICI”) and Deloitte Consulting LLP (“Deloitte”) have prepared the second edition of the Defined Contribution/401(k) Fee Study that was first conducted and published in the 2009 study. 2 Specifically, this report addresses and updates: •The mechanics of defined contribution plan fee structures; •Components of plan fees; and •Primary and secondary factors that impact fees (“fee drivers”). Approach To accomplish the objectives of the study, Deloitte and ICI supplemented their collective industry experience with a confidential, no-cost, web-based survey conducted by Deloitte from January through August of 2011. The purpose of the survey was to collect market data in order to shed light on how fees are structured within the defined contribution plan market. To enhance the study, a significantly larger sample of defined contribution plan sponsors was targeted than in 2009. •In total, 525 plans participated in the 2011 survey providing detailed information regarding plan characteristics, design, demographics, products, services and the associated fees. •On average, over 250 data elements were gathered from each plan, covering plan design, investment options and plan, participant and investment fee information. •Subsequent to the completion of the web-based survey, information was assessed for general completeness and accuracy by Deloitte. •Deloitte conducted post-survey conversations with the majority of plan sponsors to clarify and confirm responses. •Results of the survey were compared with other 401(k) industry studies to assess findings and interpret results. 1 See Investment Company Institute, “The U.S. Retirement Market, Second Quarter 2011” (September 2011); available at www.ici.org/info/ret_11_q2_data.xls. 2 See Deloitte Consulting and Investment Company Institute, Defined Contribution/401(k) Fee Study: Inside the Structure of Defined Contribution/ 401(k) Plan Fees: A Study Assessing the Mechanics of What Drives the ‘All-In’ Fee; available at www.ici.org/pdf/rpt_09_dc_401k_fee_study.pdf. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. 44 The survey results were prepared utilizing primary data obtained from sources deemed to be reliable, including individuals at the participating plan sponsor and provider organizations. The data collected represent a cross section of defined contribution plans covering a range of asset sizes and participant counts. Whereas the distribution of plans within the sample differs from the distribution of all 401(k) plans, to estimate industry-wide fees, the survey responses were weighted with respect to plan size to align with the universe of 401(k) plans reported by the DOL. Specifically, when analyzing the ‘all-in’ fee in defined contribution plans, survey responses were weighted based on asset size and participant count. It is important to note that some plan sponsors did not respond to every question. Deloitte and ICI make no representation or warranty regarding the accuracy of the data provided. In several instances, the report includes observations and interpretations of the survey results based on the collective research and marketplace experience of both Deloitte and ICI. The survey report is designed to maintain plan sponsor confidentiality. Participating plan sponsor and provider data will not be disclosed or used in any way that identifies individual survey respondents. The survey does not evaluate quality or value of services provided — both of which can impact fees. Quality of service varies with respect to the range of planning and guidance tools available to the plan sponsor and participants; educational materials; employee meetings; and other components of customer service. Qualitative differences in services may affect fees but are not easily quantified and are not addressed in this report. No part of this report may be reproduced in any form or by any means without the written permission of Deloitte. The Investment Company Institute (ICI) is the national association of U.S. investment companies. Please see www.ici.org for more information on ICI. Report Disclosure 3 See a complete discussion of the weighting method in the Appendix. Defined Contribution Plan Total ‘All-In’ Fees Per Participant Administration Per Plan Administration Asset-Based Administration Investment Management Other Recordkeeping Plan and Participant Servicing Compliance Legal Audit Form 5500 Trustee Company Stock Communications Education Investment Provider(s) Investment Consultant Financial Advice II. Executive Summary Defined contribution plans represent an important component of American workers’ retirement savings. Regulations intended to create greater transparency as to the cost of plans — for plan sponsors and participants — are drawing more attention to the various fees and fee structures in defined contribution plans. The Survey was designed to study and identify the drivers of fees in defined contribution plans across the industry. As part of ongoing research programs, ICI and Deloitte combined efforts to update and expand the Defined Contribution/401(k) Fee Study that was first published in 2009 (the “2009 Fee Study”). The data and observations in this study are based on 525 survey responses received from 520 plan sponsors. The 525 survey responses represent four times the number of survey responses as the 2009 Fee Study. 4 The majority of the growth in sample size from 2009 to 2011 can be attributed to an increase in responses from those plans with less than $1 million in plan assets. The 2011 survey was conducted from January through August of 2011. Results from the new, larger sample of plans are consistent with the key findings from the 2009 Fee Study: •Many fee structures and arrangements exist in the defined contribution marketplace. •Plan size (in terms of number of participants) was found to be a significant driver of a plan’s ‘all-in’ fee. Larger plans tend to have lower ‘all-in’ fees as a percentage of plan assets. •A correlation also exists between the ‘all-in’ fee and the average account size in the plan. Plans with larger average account balances tend to have lower ‘all-in’ fees as a percentage of plan assets. Many Fee Arrangements Exist Consistent with the 2009 Fee Study, plan sponsors and their retirement service providers continue to maintain a variety of fee arrangements to pay for plan services (Exhibit 1). There are three general groups of services that defined contribution plans typically procure. First, defined contribution plans generally require certain administrative 4 The 2009 survey sample had 117 employers representing 130 plans. See Deloitte Consulting and Investment Company Institute, Defined Contribution/401(k) Fee Study: Inside the Structure of Defined Contribution/401(k) Plan Fees: A Study Assessing the Mechanics of What Drives the ‘All-In’ Fee; available at www.ici.org/pdf/rpt_09_dc_401k_fee_study. pdf. Exhibit 1 Defined Contribution/401(k) Fee Study 2011 5 services such as compliance (to make sure the plan is administered properly), legal, audit, Form 5500, and trustee services. Administrative services also include recordkeeping services, which maintain participants’ accounts and process participants’ transactions, and often also include educational services, materials and communications for participants and plan sponsors. Investment management services are a second category. Investment options are offered through a variety of investment arrangements such as through mutual funds, commingled trusts, separate accounts, and insurance products. In some plans, investment services include the offering of company stock or a self-directed brokerage window as an investment option. A third set of services occurs in some instances when the plan sponsor seeks the professional services of an investment consultant or financial adviser and/or financial advice services for participants. There are a variety of fee arrangements to pay for the wide array of services used by defined contribution plans. The administrative service fees, which cover plan and participant recordkeeping, education, compliance and other administrative functions of the plan, can be charged directly to the employer, the participant account or the plan itself. Furthermore, these fees can be assessed in a variety of ways including as per participant fees, per plan fees, or as a percentage of total plan assets (Exhibit 1). 6 Some or all of these recordkeeping or administrative fees also can be paid through a portion of the asset-based investment expenses (e.g., in the form of 12b-1 fees, shareholder servicing fees or administrative servicing fees), which is often referred to as revenue-sharing. Asset-based investment fees are those fees that are charged by the investment manager and quoted as a percentage of assets (Exhibit 1). Participants, like all investors, typically pay these asset-based fees as an expense of the investment options in which they invest. These investment fees make up a significant portion of total plan expenses according to our sample — 84% of the ‘all-in’ fee. As indicated above, some of these asset-based investment fees may be covering participant services in addition to investment management. Asset-based investment expenses generally include three basic components: (1) investment management fees, which are paid to the investment’s portfolio managers (often referred to as investment advisers); (2) distribution and/ or service fees (in the case of mutual funds, these include 12b-1 fees); and (3) other fees of the investment option, including fees to cover custodial, legal, transfer agent (in the case of mutual funds), recordkeeping, and other operating expenses. Portions of the distribution and/or service fees and other fees may be used to compensate the financial professional (e.g., individual broker or plan recordkeeper) for the services provided to the plan and its participants and to offset recordkeeping and administration expenses. All of the different services and associated fees can be combined together in a variety of different ways based on the needs of the plan sponsor. As plan sponsors negotiate with retirement service providers to obtain services for their plans, a range of scenarios or arrangements is generally considered (e.g., number and types of investment options and their fee structures, proprietary versus non-proprietary investment options, range of participant communications and educational services that will be provided). Plan sponsors generally are not presented a single fee quote, but rather a range of options from each retirement service provider competing for the plan sponsor’s business. The ‘All-In’ Fee Because plan sponsors allocate the responsibility of these two major expense categories (investment versus administrative or recordkeeping) between participants, the employer and the plan, it is helpful to use a measure that can compare plans despite these different arrangements. Therefore, this study carries forward the concept of the ‘all-in’ fee introduced in the 2009 Fee Study to normalize fee structure variation. The ‘all-in’ fee includes all administrative or recordkeeping fees as well as investment fees (i.e., the investment option’s total expense ratio) whether they are assessed at the plan, employer or participant level. The ‘all-in’ fee excludes those recordkeeping and administrative activity fees that only apply to particular participants who engage in the activity (e.g., self-directed brokerage, loans, QDROs and distributions). While these specific activity-related fees are an important consideration for participants engaging in the activity, they are not part of the core expense of administering a plan. Totaling all administrative, recordkeeping and investment fees, the median participant-weighted ‘all-in’ fee for plans in the 2011 Survey was 0.78% (Exhibit 2) or approximately $248 per participant. 5 The data suggest that the participant at the 10th percentile was in a plan with an ‘all-in’ fee of 0.28%, while the participant at the 90th percentile was in a plan with an ‘all-in’ fee of 1.38%. 5 As explained on page 21, these results have been weighted to better reflect the universe of 401(k) plan participants and therefore the experience of the typical 401(k) plan participant. ‘All-In’ Fee: % of Assets (Participant Weighted) 0.92% 0.86% 0.37% 1.71% 0.83% 0.78% 0.28% 1.38% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% Mean Median 10th Percentile 90th Percentile 2009 2011 Exhibit 2 6 A variable was determined to be a primary ‘all-in’ fee driver if it was significant at the 1% level in the regression analysis. For details of the regression analysis, see the Appendix. 7 This pattern is also seen in mutual fund expense ratios. See Breuer and Collins, “Trends in the Fees and Expenses of Mutual Funds, 2010,” ICI Research Perspective 17, No. 2 (March 2011); available at www.ici.org/pdf/per17-02.pdf. Apparent ‘All-In’ Fee Drivers After calculating the ‘all-in’ fee for each plan, a regression analysis was conducted to determine those variables that appear to explain a plan’s overall level of fees (measured by the ‘all-in’ fee as a percentage of assets). The primary drivers 6 of a plan’s overall level of fees were: •Plan size as measured by number of participants; •Average participant account balance in the plan; and •The percentage of the plan’s assets in equity investment options. The variables related to plan size were negatively correlated with the ‘all-in’ fee, while the percentage of assets in equity investment options was positively correlated to the ‘all-in’ fee. Within any defined contribution plan, there are fixed costs required to start up and run the plan. A large portion of these fixed costs is driven by legal and regulatory requirements. The survey responses suggest economies are gained as a plan grows in size because these fixed costs can be spread over more participants and/or a larger asset base. The survey also showed that equity investment options have higher expense ratios than fixed income or other asset classes. 7 The regression analysis indicated that a 10 percentage point shift in plan assets into equity investment options is associated with an added 2.6 basis points to the ‘all-in’ fee. In addition to plan size and the percentage of assets invested in equity investment options, there are other factors that help explain the variability in plan fees. These secondary drivers can help explain variability between plans of similar participant or asset size. The following characteristics appear to be related to lower ‘all-in’ fees: •Higher participant contribution rate; •Lower number of investment options; and •Use of auto-enrollment. Predicted Fees as a Percent of Assets by Account Size and Number of Plan Participants (All Other Explanatory Variables=Unweighted Means) 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% $10,000 $30,000 $50,000 $70,000 $90,000 $110,000 $130,000 $150,000 Fees as a Percent of Assets Average Account Balance 10 100 1,000 10,000 50,000 Number of Plan Participants When combining the primary and secondary drivers in a regression analysis, the results showed a relatively high correlation with the ‘all-in’ fee (R 2 of 0.5317) when treating the ‘all-in’ fee (measured as a percentage of assets) as the dependent variable. Combining plan size with the secondary driver variables, a predictive chart can be created that displays an ‘all-in’ fee by plan size that is consistent with the survey results. For example, Exhibit 3 highlights the negative correlation between the ‘all-in’ fee and the average account balance (follow a given line from left to right) and the number of participants in the plan (lines shift down as plan size increases). Exhibit 3 Note: See Exhibit A2 in the Appendix Defined Contribution/401(k) Fee Study 2011 7 88 8 The S&P 500 total return index increased 45.4% between year-end 2008 and year-end 2010. The long-term corporate bond total return index increased 15.8% over the same time period. See Morningstar, Ibbotson ® Stocks, Bonds, Bills, and Inflation ® (SBBI ® ) 2011 Classic Yearbook: Market Results for Stocks, Bonds, Bills, and Inflation, Chicago, IL: Morningstar, Inc. (2011). Comparing the 2009 and 2011 ‘All-In’ Fee Studies The median participant ‘all-in’ fee of 0.78% of assets in the 2011 Fee Study is lower than that observed in the 2009 Fee Study, which was 0.86% of assets (Exhibit 2). There are a number of factors that may contribute to the decline in the ‘all-in’ fee between the 2009 Fee Study and the study conducted in 2011. These factors include different samples of plan sponsors; a larger survey population (over four times as large); different asset allocations (some driven by market performance between the two years); and different fee structures within the industry. Despite these differences, this study found the two primary drivers from the prior survey continued to be important factors in explaining the variation in fees across plans within the 2011 survey sample. Specifically, this study showed that plan size as measured by number of participants and average account balance were primary drivers of a plan’s ‘all-in’ fee, which was also the case in the 2009 Fee Study. In addition to the two plan size related primary drivers, the 2011 Fee Study found that the percentage of a plan’s assets in equity investment options was also determined to be a primary driver of a plan’s ‘all-in’ fee. This factor was identified as a secondary driver in the 2009 Fee Study. One reason for the lower median ‘all-in’ fee in the 2011 Fee Study versus the 2009 Fee Study may also be related to the relationship between asset-based fees and non-asset-based fees. When plan asset information was collected in the 2009 survey, investment markets had just experienced the turmoil of the financial crisis in late 2008. Since that time, financial markets have rebounded, 8 and total plan assets have grown. As defined contribution plan assets grew, the non-asset based fees would have been spread out over a larger asset base causing them to fall as a percentage of assets. Summary This report, which updates a similar analysis performed in 2009, was developed to provide marketplace survey data that can help explain the mechanics, components and drivers of defined contribution/401(k) plan fees. This Study used an analytical bottom-line measure — the ‘all-in’ fee — to compare total plan fees across the varied pricing practices (per plan fees, per participant fees, and asset- based fees) used in defined contribution/401(k) plans. The results showed that the ‘all-in’ fee varies across plans of different plan size market segments. The Survey found that asset-based investment-related fees represent 84% of defined contribution/401(k) plan fees and expenses. In many plans, a portion of these fees is used to pay for some or all of the administrative and recordkeeping services of the plans, in addition to investment management. This study indicates that the primary drivers of fees are plan size — measured by number of participants in the plan and average account balance — and the percentage of plan assets invested in equity investment options. The ‘all-in’ fee as a percentage of assets tends to be lower in plans with a higher number of participants and higher average participant account balances. Defined contribution/401(k) plans have fixed administrative costs necessary to run a plan that tend to cause smaller plans to have higher relative fees as a percentage of assets. As a plan grows in size, economies are gained which spread the fixed costs over more participants and a larger asset base. The ‘all-in’ fee tends to be higher the larger the share of plan assets invested in equity investment options, reflecting the higher expense ratios typically associated with equity investments. Additional influencers of fees that were found to appear to further help explain variances in the ‘all-in’ fee include participant contribution rates, the number of investment options in the plan, and the use of automatic enrollment. Defined Contribution/401(k) Fee Study 2011 9 A number of other variables were tested and appear not to be direct drivers of the ‘all-in’ fee. The number of payrolls, which might result in increased administrative complexity, was not found to be an apparent driver of fees. The number of business locations, which might have increased the complexity in delivering participant education, was not found to be a driver of fees. The type of service provider (mutual fund company, life insurance company, bank, third party administrator), size of service provider, length of time since the last competitive review of the retirement service provider by the plan sponsor, and tenure with the service provider also were not found to be significant factors in a plan’s ‘all-in’ fee. In addition, the percentage of assets invested in the investment products of the service provider (proprietary investments) did not appear to have a significant impact on the ‘all-in’ fee as a percentage of assets. The remainder of this report discusses the construction and analysis of the total fees in defined contribution/401(k) plans; and the factors that influence fees, referred to as “drivers.” Section III describes the characteristics of the plan sponsors that participated in the survey. Section IV explains the mechanics of how fees are charged and the services that the plans and their participants receive for the fees. Section V introduces the concept of the comprehensive bottom-line or ‘all-in’ fee, and how this measure facilitates comparisons across plans. Section VI identifies the key drivers that explain fee differences among plans. Section VII summarizes the Study’s findings. Section VIII, the Appendix, provides additional detail on sample weighting, the statistical regression analysis results and a glossary. Plan Sponsor Demographics This section highlights the characteristics of the 525 defined contribution plans that participated in the survey including their demographics, provider relationships, size and plan design features. When assessing plan fees, these characteristics provide context as to the composition of survey participants. Where possible, the sample of plan sponsors is compared to a universe aggregate provided by the DOL Form 5500 benchmark for 401(k) plans or other survey samples. Plans by Asset Size Segment or Number of Plan Participants A total of 520 employers representing 525 defined contribution plans participated in the 2011 Deloitte/ICI Fee Study. This is an increase in sample size relative to the 2009 Fee Study, which had 117 employers representing 130 defined contribution plans. The demographic information reported in the following pages was used in the study to help clarify which specific characteristics, if any, appear to drive plan fees. 10 9 The latest year available is for 2008 plan year data. See U.S. Department of Labor, Employee Benefits Security Administration, Private Pension Plan Bulletin Abstract of 2008 Form 5500 Annual Reports (Version 1.0; December 2010); available at http://www.dol.gov/ebsa/PDF/2008pensionplanbulletin.PDF. III. Survey Respondents Plans by Asset Size Segment Plans by Asset Size Segment # of Plans % of Plans Micro <$1M 293 56% Small $1M – <$10M 51 10% Mid $10M – <$100M 59 11% Large $100M – <$500M 68 13% Mega $500M – $1B 17 3% Mega+ >$1B 37 7% Total 525 100% Exhibit 4 To allow for a detailed view into variation of fees by market size segment, plan sponsor responses were grouped and analyzed across six plan size segments as measured by total plan assets (Exhibit 4) or number of plan participants (Exhibit 5). Whether measured by plan assets or number of plan participants, the 2011 sample covers a wide Plans by Participant Size Segment Plans by Participant Size Segment # of Plans % of Plans* <100 334 64% 100 – 499 28 5% 500 – 999 18 3% 1,000 – 4,999 81 15% 5,000 – 9,999 22 4% 10,000+ 42 8% Total 525 100% Exhibit 5 range of plan sizes. Because the distribution of plans across the sample differs from the universe of 401(k) plans, survey results related to the ‘all-in’ fee were weighted to represent the distribution of participants, plans or assets in the 401(k) universe with respect to plan assets and number of participants. * Percentages do not add to 100% because of rounding. Sample of Survey Plans Compared with the Broader 401(k) Plan Universe The universe of defined contribution plans is diverse, consisting of plans of various asset sizes and numbers of participants. The 2011 Deloitte/ICI sample consisted of 525 plans with 1.8 million participants and $154 billion in plan assets. In plan year 2008, DOL Form 5500 data indicate there were approximately 511,600 401(k) plans, with more than 60 million participants, and $2.2 trillion in assets. 9 More than half of plans in the DOL 401(k) plan universe and the Deloitte/ICI sample are small plans: 70.6% of 401(k) plans in the DOL universe have less than $1 million in plan assets and 55.8% of plans in the 2011 Survey are that small (Exhibit 6). On the other hand, larger plans hold a sizable portion of plan assets. The largest plans (plans with over $1 billion in assets) held 38.1% of all 401(k) plan assets in the DOL universe benchmark and 80.9% of the plan assets in the Deloitte/ICI survey sample. [...]... — plans, participants, or assets Because the majority of defined contribution plans are small (whether considering plan assets or number of participants in the plan) , estimating the ‘all-in’ fee on a plan- weighted basis results in higher estimates of the ‘all-in’ fee For example, the median plan in this study had an ‘all-in’ fee of 1.27% of assets; 10% of plans had ‘all-in’ fees of less than 0.87% and... brokerage, loans, QDROs, and distributions) The ‘all-in’ fee was calculated for each plan in the survey by summing all recordkeeping, administration and investment fees to arrive at a total dollar amount This amount was then divided by the total plan assets to arrive at the ‘all-in’ fee as a percentage of plan assets Also, each plan s total dollar fee amount was divided by total participants in the plan. .. ‘all-in’ fee of 0.28% and the participant at the ‘All-In’ Fee (% of Assets) by Plan Asset Size Segment (Participant Weighted) 90th percentile was in a plan with an ‘all-in’ fee of 1.38% (Exhibit 29) 1.60% Plan asset size is again a primary driver in explaining the total plan ‘all-in’ fee as a percentage of assets Plans with higher total assets tend to have lower ‘all-in’ fees For example, the median participant-weighted... to have higher ‘all-in’ fees as a percentage of assets The variables related to plan size were the same primary variables observed in the 2009 Fee Study, which supports the finding that these variables are primary drivers of fees Variables Plan asset size Number of participants Average account balance Plan sponsor industry Plan related Median 'All-In' Fee (% of Assets) by Plan Asset Size Segment (Participant... statistical analysis This analysis included assessing the impact and correlation of multiple independent variables on the dependent variable — the ‘all-in’ fee as a percentage of plan assets Primary ‘All-In’ Fee Drivers Primary drivers include the key variable(s) impacting fees across plans in the survey The results of the statistical regression analysis pointed to the size of the plan and the plan s percentage... ‘all-in’ fee of 0.78% of plan assets Plan Size and Asset Allocation Appear to be Primary Drivers of the ‘All-In’ Fee The ‘all-in’ fee varied due to a number of plan- related variables Statistical regression analysis found that plan size and percentage of a plan s assets invested in equity investment options appeared to be the most significant drivers of fees 32 More specifically, further analysis showed that... comparison across plans The ‘All-In’ Fee The ‘all-in’ fee, which includes recordkeeping, administration and investment management, was evaluated primarily as a percentage of total plan assets Across all plans in the Survey: • The ‘all-in’ fee varied from 0.28% of assets (10th percentile participant) to 1.38% of assets (90th percentile participant) T • he median participant was in a plan with an ‘all-in’. .. Washington, DC; available at www.dol.gov/ebsa/ PDF/2008pensionplanbulletin.PDF 27 In the report, Exhibit 3 plots the impact of average account balance and number of plan participants on the ‘all-in’ fee for a variety of combinations of average account balance and number of plan participants Defined Contribution/401(k) Fee Study 2011 33 Variables Analyzed as Possible Fee Drivers Variable name Type of. .. plans whether measured in terms of plan assets or number of plan participants Larger plans with more assets and/or more participants have a much larger base over which to spread fixed costs Plan Asset Allocation The percentage of a plan s assets invested in equity investment options was also found to be a primary driver of the ‘all-in’ fee in the 2011 Fee Study Plans with a higher percentage of plan. .. identify the factors that appear to be relevant in the determination of the plan fee To compare fees across plans, this bottom-line or ‘all-in’ fee was calculated combining all administration, recordkeeping, investment fees, and plan financial consultant fees At the end of the day, whether a plan sponsor is adding up component fees or looking at a more comprehensive package, the ‘all-in’ fee allows for a . the ‘all-in’ fee and the average account size in the plan. Plans with larger average account balances tend to have lower ‘all-in’ fees as a percentage. to be a significant driver of a plan s ‘all-in’ fee. Larger plans tend to have lower ‘all-in’ fees as a percentage of plan assets. • A correlation also